Trade fairs are great places to network and do deals, but they also have another invaluable quality: they can provide unique insight into the market in which they are taking place and the way in which it is evolving. This is especially true of the London Wine Fair.
Rich history
Launched in 1981 in a small venue on the top of a central London department store in Kensington, the event – then called the London Wine Trade Fair - was an instant success. The setting, which included lush roof gardens, complete with live flamingos, certainly helped, but the timing was right too. The 1980s were a period when the UK was evolving from being the home of traditional fine wine merchants and auctioneers, and a few popular big brands such as Mateus Rosé and Blue Nun, to the vibrant heart of the global wine world. What Britain’s musicians and clothes designers had enjoyed in the 1960s, London’s wine-buyers and opinion-formers began to relish two decades later. Australian wines were almost invisible in the UK in 1979; by 1989 they were already elbowing French and German bottles off the shelves.
The show outgrew its rooftop home and moved a short distance westwards along the same street to the nearby nineteenth-century Olympia exhibition hall. The extra space was snapped up by generic bodies like the Australians, New Zealanders, Californians, Argentines and Chileans whose stands tended to attract greater numbers of visitors than those of the traditional European nations. This popularity was partly explained by the friendly attitude of the winemakers who had travelled across the world to the British capital and the novelty of their wines and packaging – and partly to the provision of beer at the end of the day.
Wine buyers from outside the UK rapidly discovered the appeal of the London show. The US had no such event and Vinexpo, which was in any case deemed huge and pompous by many down-to-earth New Worlders, handicapped itself by losing the Australians as exhibitors after the 2003 edition in which air conditioning failure led to the wines in their part of the show being turned into soup.
Meanwhile the British event, which had now been rechristened the London International Wine Trade Fair in recognition of its global importance, had outgrown its Olympia home. In 2001 it had moved east to the newly opened, purpose-built ExCeL Centre.
From the outset, the new venue was less than entirely popular with some of the UK trade. It was described as ‘soulless’ – an adjective that would apply to almost all modern exhibition halls – and hard-to-get-to, because the journey involved a train that was not part of the London Underground network. Few of the critics acknowledged the success of London City Airport, a similarly young neighbour of ExCeL’s that was accessed via the same train lines. Despite the moaning, the fair initially did well at ExCeL. Hundreds, possibly thousands of managers and assistant managers working for big retail chains like Oddbins, Majestic, Wine Rack and Bottoms Up made the trip to ExCeL and were rewarded with the opportunity to meet and talk to some of the producers whose wines they were selling.
The venue may not have been surrounded by as many pubs and restaurants as Olympia, but it was on a dockside. This allowed exhibitors like Cliff Roberson, chief executive of big-supermarket-supplier, Buckingham Schenk, to host lavish lunches for buyers on a boat moored alongside the halls, while brands such as Penfolds took their guests on evening river cruises along the River Thames.
By 2010, however, the honeymoon was over. Major distributors like Liberty Wines had ceased to exhibit, preferring to spend their money on their own tastings, while long-standing supporters like the New Zealanders and South Africans began to suggest that they did not need to attend either. Among the most vocal critics was Peter Darbyshire, managing director of PLB, another big-supermarket-supplier who openly questioned the rationale behind spending as much as £200,000.00 ($306,000.00) or more – the cost of a large stand – on talking to the half-dozen companies that buy four in every five bottles sold in the off-trade. In 2012 Darbyshire estimated that the total cost of the event to exhibitors and visitors amounted to over £25m.
Changing market
Apart from the impact of the global financial crisis, the change in the fair’s fortunes was also explained by a fundamental change in the UK retail scene. In 2009, First Quench, owners of 1,300 Threshers and Wine Rack shops, went into administration. Two years later, Oddbins, a chain that had once been a multi-award-winning trailblazer with 278 shops, also crashed. Between 2005 and 2012, Britain lost over 3,000 multiple wine specialist outlets. Majestic survives, as do Oddbins and Wine Rack, as far smaller chains under new owners, but the turnover of these two chains is a fraction of what it had been two decades earlier. Buying power had shifted to a handful of supermarkets who, as Darbyshire pointed out, now controlled 85% of the retail market. The role of these chains was plainly illustrated by the decision of Tesco to take a stand at which would-be suppliers could pitch their wines.
The 19% of UK imports sold in the on-trade, while less consolidated, also now passes through the hands of a shrinking number of distributors, some of which, like Liberty, saw no reason to exhibit. An attempt to launch an exclusively on-trade event – also at Olympia – was short-lived.
In 2014, after long and ultimately fruitless discussions over whether to launch consumer days, as happens in other parts of Europe and in Hong Kong, the organisers, Brintex, bowed to pressure and relocated the show back to its old home of Olympia. Critics such as Darbyshire remained less than wholly convinced by the event, but the UK wine trade acknowledged a duty to support the event, embodied by Richard Siddle, editor of the UK trade publication Harpers editorial call for: “No more griping please, let's get behind the London Wine Fair.”
The first year back at Olympia was almost universally deemed a success, and the recently appointed show director, Ross Carter, was praised for instilling a spirit of vibrancy that had been missing from the fair for several years. Among the innovations were a greater focus on talks and seminars and an area called Esoterica – almost a fair within the fair – where smaller producers and distributors unwilling or unable to pay for a stand, could pour their wines.
This year brought another new development, in the shape of a section called Wine Unearthed, for producers whose wines lacked any distribution in Britain. Among the exhibitors was Olaf Malver, owner of of the Danieli winery in Georgia. Malver was pleased with his first foray into the UK, saying that: “We received constructive and positive feedback from several winemakers, UK wine critics and even some local high-end sommeliers.” Even more importantly: “Five small wine importers and the Wine Society showed a genuine interest and we are following up with dogged determination.”
Upstairs at the 2015 Esoterica, a larger event than in 2014 with 79 tables, there was even greater enthusiasm. This was, without doubt the busiest part of the fair, and exhibitors like former supermarket buyer turned wine producer Justin Howard Sneyd MW of Domaine of the Bee in Languedoc were delighted at the number of independent retailers, sommeliers and press they saw.
Two fairs in one
Larger producers on the floor of the exhibition had more mixed views. Etienne Hugel of Alsace, who has decided for the first time not to take space at Vinexpo this year, saw all the people he wanted to meet, but others, including one exhibitor focused on the on-trade, complained that potential customers seemed to be more interested in wines on show at Esoterica than the ones on his stand.
Carter acknowledges the possible validity of the charge that he is now running two fairs – Esoterica and the London Wine Fair – and the challenge this represents. “Esoterica has certainly drawn in far more independent retailers and on-trade people than in previous years,” with 1,200 of the former and around 3,700 of the latter. “But a couple of the bigger ground floor exhibitors have made comments about competing with the smaller ones upstairs and we are considering reducing the size of Esoterica next year.”
Carter also acknowledged one of the most striking aspects of the 2015 London Fair: the absence of Australian, Argentine, Californian, New Zealand and South African generic stands. “Yes, there’s not as much representation from the New World. A lot of the wines are on show on producers and distributors’ stands, but many of the exhibitors now seem to think that the UK is a developed market. They want to focus more on markets in Asia and elsewhere.” Robustly defending his show and country, Carter continues, “I think it’s an oversight. The UK doesn’t have the growth it once had, but it’s still a fast evolving market.”
Only 12% of the visitors are from overseas now, compared to around 20% in the fair’s heyday, and there is no denying that visitors who once made their way to London now go to Düsseldorf instead.
Hanging over the 2015 fair were some more recent events. Tesco’s recent poor financial performance, and the scandal surrounding supplier payments have led to the chain announcing that it will cut its range by a third – plus will fire a number of its buyers. Other supermarkets are expected to follow Tesco’s example, and few would be surprised to see range reductions being closer to 40% than 33%.
Worse still, for would-be suppliers, is a general belief that the big retailers will continue to reduce the numbers of suppliers with whom they want to deal.
This trend explains Carter’s emphasis on the appeal of the London Fair to the independent sector. Unfortunately, anyone who has analysed the market will have noted that there are, according to most estimates, only around 800 of these ‘indies’, with an average turnover of less than £400,000.00 per year. Even so, Carter believes that his event still appeals to regions and countries that were not at the 2015 event. “We have had a lot of interest from several French regions, and I expect some of the smaller countries to return,” he says.
Time will tell whether he is right – and whether some of this year’s bigger exhibitors will decide to return after their mixed impressions in 2015. If they don’t, questions will continue to hang over the event, and its validity as an annual fair in a central London venue.
